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2025-09-16 11:15:07
Australian Dollar Hits New High for the Year, Technical Momentum Favors: 1. The Australian dollar managed to reach its highest point for the year for the fifth consecutive trading day on Tuesday, as the outlook for interest rates and interest rate differentials favored the currency, while technical momentum remained bullish. The Australian dollar held steady at $0.6667 against the U.S. dollar, having earlier risen to a new 10-month high of $0.6677. It is now within striking distance of the next technical barrier of $0.6687, a break of which would open the way to $0.6793 and last year's high of $0.6943. 2. After hitting an eight-month high against the Japanese yen last week, the Australian dollar is currently trading at a favorable level of 98.25 yen and is poised to test the January highs of 98.82 and 99.15. Richard Franulovich, head of FX strategy at Westpac, said the Australian dollar finally broke free last week, demonstrating stronger and more satisfying forward momentum. Political and fiscal turmoil in Tokyo, Paris and London pose challenges to the outlook for the euro, yen and pound from time to time, while unstable labor market/growth momentum themes suppress the Canadian, US and New Zealand dollars from time to time. Judging from these indicators, the Australian dollar looks like a real safe haven; 3. Assistant Governor of the Reserve Bank of Australia Hunt said on Tuesday that the outlook for the Australian economy is balanced, with both upside and downside risks, while there are signs that consumer spending is picking up. She said that the underlying inflation rate is getting closer to the mid-point of the RBA's target range of 2% to 3%, and the goal is to get the economy as close to full employment as possible. This is one of the reasons why the market believes that there is only a 20% chance that the RBA will cut interest rates again at its meeting on September 30, and assumes that the RBA will pause its rate cuts until its next meeting in November, when there will be more inflation data. In contrast, the market is digesting expectations that the Federal Reserve will cut interest rates by another 125 basis points, and may cut interest rates at each of the next five meetings.
